New York regulator warns crypto firms against commingling corporate and user funds

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(Kitco News) - The New York Department of Financial Services (NYDFS) has issued a new set of guidelines to crypto firms licensed in the state on how they should handle customer assets in order to prevent losses, emphasizing “the paramount importance of equitable and beneficial interest always remaining with the customer.”

NYDFS superintendent Adrienne Harris issued the guidance on Jan. 23, saying that firms that operate under the state’s BitLicense should segregate corporate funds from users’ virtual currency holdings both on-chain and in the “internal ledger accounts” of the company’s custodian.

“To custody customer virtual currency properly and maintain appropriate books and records, a VCE [virtual currency entity] Custodian is expected to separately account for and segregate customer virtual currency from the corporate assets of the VCE Custodian and its affiliated entities, both on-chain and on the VCE Custodian’s internal ledger accounts,” the letter from Harris said.